Dividend Stocks
Dividends can produce as much as a third of your total return over long periods, and you can even retire on dividends.
There are 4 key stock dividend dates that are involved with dividend payments:
1- The Declaration Date is several weeks in advance of a dividend payment—it’s when company’s board of directors sets the amount and timing of the proposed payment.
2- The Payable Date is the date set by the board on which the dividend will actually be paid out to shareholders.
3- The Record Date is for shareholders who hold the stock before the payable date and receive the dividend payment. That date is set any number of weeks before the payable date.
4-The Ex-Dividend Date is two business days before the record date and it’s when the shares begin to trade without their dividend. If you buy stocks one day or more before their ex-dividend date, you will still get the dividend. That’s when a stock is said to trade cum-dividend. If you buy on the ex-dividend date or later, you won’t get the dividend. The ex-dividend date is in place to allow pending stock trades to settle.
We think very highly of stocks that have been paying dividends for five or more years, at TSI Network. Many of these stocks fit in well with our three-part Successful Investor philosophy:
1- Invest mainly in well-established companies;
2- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities);
3- Downplay or avoid stocks in the broker/media limelight.
[text_ad]
Read More
Close
Dividend Stocks Library Archive
We assign companies an SI Rating using a point system that’s based on nine key factors: profit and dividend history, balance sheet strength, industry prominence, geographical diversification, freedom from excessive regulation and business cycles, and the ability to profit from secular trends and habitual behavior. We constantly review these ratings, and make changes accordingly. In the late 1990s and the early part of this decade, INCO LTD. $54 (Toronto symbol N) struggled as the Asian economic crisis led to lower nickel demand and prices....
Consumers today generally have more money to spend, but less time to shop. Consequently, demand for ready-to-eat convenience foods has shot up. But consumers are also paying more attention to food safety and nutritional content. They are also developing an appetite and a budget for a wider variety of higher quality, more expensive foods. These trends have forced Canada’s major food retailers to invest heavily in new products and stores. Increasing competition from drug stores has also put pressure on traditional grocery stores. Perhaps the biggest threat to Canadian food retailers comes from U.S.-based Wal-Mart, which plans to open up full grocery stores adjacent to some of its current Canadian locations. However, the Canadian food industry is less fragmented than in the United States, and has more discount retailers. Wal-Mart owes some of its success to the weakness of the competition in many U.S. areas. It could have a tough time building market share here....
IMPERIAL OIL LTD. $119 earned $3.00 a share in the fourth quarter of 2005, up 96.1% from $1.53 a year earlier, largely due to higher oil and gas prices. Cash flow per share rose 46.3%, to $3.76 from $2.57. (Note: we have not adjusted these per share figures for a 3-for-1 split planned for May 2006.) However, Imperial’s earnings growth could slow in the next year or two as it expands its oil sands and pipeline investments. Hold. ALIANT INC. $29 earned $0.41 a share in its latest quarter, up sharply from just $0.04 a year earlier, mostly due to the end of a five-month strike in 2004. Strong demand for wireless and high-speed Internet services also helped drive earnings. The company also increased its annual dividend rate 5.1%, from $1.18 a share to $1.24. It now yields 4.3%. Buy. ANDRES WINES LTD. $26 plans to consolidate two of its wineries in B.C. This will cost it $2.5 million, but should cut its long-term operating costs. Higher grape prices cut Andres profits in its latest quarter 22.2%, to $3.5 million from $4.5 million a year earlier. Per-share earnings fell to $0.72 from $0.93. The stock is still a buy.
GENNUM CORP. $16 (Toronto symbol GND; SI Rating: Above average) makes chips and related components for a wide variety of industrial and consumer electronic products. Its video products division makes chips for TV display manufacturers, and supplies about 70% of its total revenue. Gennum’s products transport video signals without losing picture quality. Gennum’s audio division, which makes chips that power two-thirds of the world’s hearing aids, accounts for 25% of its revenue. The remaining 5% comes from computer network equipment. Gennum’s revenue rose from $93.1 million in 2001 (fiscal years end November 30) to $142.7 million in 2005. Earnings grew from $0.30 a share (total $10.5 million) in 2001 to $0.43 a share ($15.3 million) in 2003, but fell to $0.38 a share ($13.5 million) in 2004 due to a loss at the audio division. Losses at the audio division grew in fiscal 2005, but a 36% jump in video profits raised Gennum’s total earnings to $0.57 a share ($20.4 million)....
CAE INC. $9.55 (Toronto symbol CAE; SI Rating: Above average) is thinking about building a new pilot training facility in India. CAE currently has 22 facilities, mainly in North America and Europe. The new training centre would cost CAE about $90 million, or over five times the $17.8 million or $0.07 a share that CAE earned in its first fiscal quarter ended September 30, 2005. India presently has no such facility and sends its pilots to schools in other countries, so this investment would give CAE a first-in advantage over competitors such as Boeing. It should also pay off quickly, since Indian airlines are expanding rapidly, and plan to hire 3,000 new pilots in the five years. CAE could also use the new school to train pilots for India’s air force. CAE is a buy.
DOFASCO INC. $71 (Toronto symbol DFS; SI Rating: Average) has accepted a $71.00-a-share takeover offer from Arcelor SA after rival bidder ThyssenKrupp AG decided not to match Arcelor’s offer. However, UK-based Mittal Steel Co. has launched a hostile takeover for Arcelor. Mittal’s bid for Arcelor is unlikely to affect Arcelor’s plan to buy Dofasco. Dofasco shareholders should tender their shares to Arcelor to avoid paying brokerage commissions. FAIRMONT HOTELS & RESORTS, INC. $51 (Toronto symbol FHR; SI Rating: Average) has accepted a $45.00 U.S.-a-share takeover offer from a private investment group. That tops a $41.00 U.S. offer from American investor Carl Icahn for 51% of Fairmont. Icahn has also accepted the new offer....
MANITOBA TELECOM SERVICES INC. $39 (Toronto symbol MBT; SI Rating: Average) earned $0.22 a share (total $14.6 million) in the fourth quarter of 2005, down 65.1% from $0.63 a share ($42.3 million) a year earlier. However, if you disregard unusual items, per-share profits fell 12.2%, to $0.65 from $0.74, due to lower earnings from Allstream, its national long distance division. Revenue slipped to $503.7 million from $503.9 million. The stock has come under pressure in the past few months due to concerns that new local phone services will cut into Manitoba Tel’s revenue. The company is also facing strong competition from other wireless providers, particularly in Winnipeg. Manitoba Tel now plans to cut capital spending by 21.1%, from $342.1 million in 2005 to $270 million in 2006. It also aims to cut its annual costs by $100 million. That should give it enough cash to maintain the $2.60 a share dividend, which yields 6.7%....
FINNING INTERNATIONAL INC. $39 (Toronto symbol FTT; SI Rating: Above average) sells, rents and services Caterpillar brand heavy equipment, including tractors, log loaders, front shovels and asphalt compactors. Customers mainly include the mining, construction, and forestry industries in Western Canada. It also has operations in the UK, Ireland and South America, but Canada provides 40% of its revenue. In November 2004, Finning sold $292.8 million worth of new common shares to fund acquisitions. Thanks to these extra shares, Finning’s per-share profits in the third quarter of 2005 fell 9.1%, to $0.50 from $0.55 a year earlier, although total income rose 3.9%, to $48.4 million from $43.1 million. Revenue grew 11.8%, to $1.23 billion from $1.1 billion. Finning’s expanding foreign operations increase its currency risk. In fact, the higher Canadian dollar cut Finning’s third quarter earnings by $0.08 a share. Like most companies, Finning uses hedging contracts to manage this risk. But even with these contracts, unfavourable foreign exchange rates will probably cut its 2006 earnings by $0.18 a share....
ALCAN INC. $56 (Toronto symbol AL; SI Rating: Average) plans to close two European smelters and consolidate some of its packaging operations. These moves cut Alcan’s after-tax profits in the fourth quarter of 2005 by $409 million (all amounts except share price in U.S. dollars). It also wrote down $122 million of goodwill related to the packaging operations. If you exclude all unusual items, Alcan earned $2.44 a share (total $911 million) in 2005, up 13.0% from $2.16 a share ($800 million) a year earlier. These moves should cut Alcan’s long-term costs and risk. It will also help it take full advantage of rising aluminum prices. The stock has gained 50% in the past six months, and now trades at 15.4 times its 2006 forecast profit of $3.17 U.S. a share....
HART STORES INC. $4.25 (Toronto symbol HIS; SI Rating: Speculative) operates 71 mid-sized department stores, mainly in Quebec and Eastern Canada. In the past year, Hart has opened eight new stores, including its five in Ontario. It prefers to focus on smaller urban centres that larger chains tend to avoid. Thanks to this expansion, Hart’s revenue in the nine months ended October 29, 2005 increased 10.5%, to $100.9 million from $91.3 million a year earlier, mostly due to strong sales of apparel and home furnishings. However, same-store sales fell 1.3%. Income rose 42.1%, to $0.27 a share from $0.19....